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Microsoft CRM 3.0 All About the Integration

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Posted December 7, 2005 By Dan Muse     Feedback

The software giant announces the availability of the long-waited Microsoft CRM 3.0, touts tighter integration with Outlook and a hosted version.

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If you've been waiting to see how Microsoft has improved its CRM application, the wait is over. About two years in the making, Microsoft Dynamics CRM 3.0 adds new marketing features, tighter integration with Microsoft Office and Outlook and a hosted option.

"We have been building products specifically designed for small business," said Doug Leland, general manager of Small Business at Microsoft. "This is the next phrase." Earlier this year, Microsoft issued a free upgrade to its Business Contact Manager extension to Outlook. And this fall, the company shipped Microsoft Office Small Business Accounting.

Microsoft CRM 3.0 is designed to address the primary reasons CRM applications fail, Leland said. Those reasons include limited user adoption, business fit and total cost of ownership. "What has plagued CRM is not having it added seamlessly into the workflow."

Potential customers for Microsoft CRM may be people who are relying solely Outlook or a contact manager such as ACT! "or it maybe a mixture of technologies and products." Most likely customers, he added, are businesses with between 20 and 50 employees.

Smaller companies, he said, are more likely to use Microsoft Business Contact Manager working with the recently released Microsoft Office Small Business Accounting software. "Businesses with 20 to 50 employees businesses have different needs and are probably using something like Microsoft Dynamics Navision and Dynamics Great Plains [rather than Microsoft Office Small Business Accounting]," Leland said.

However, if a small business is outgrowing Business Contact Manager, "we offer seamless integration with CRM 3.0," Leland said.

Microsoft CRM 3.0 Small Business Edition is designed to run on Microsoft Windows Small Business Server (SBS) and is "optimized for businesses to install with 10 clicks of the mouse," Leland said.

Does the wizard-driven configuration and integration with Small Business Server make the installation process easy enough for small businesses to handle without help? That depends on two things, Leland said. The business's complexity and its IT aptitude, "which many small business customers don't have," he said. Those businesses needing help can tap one of Microsoft 2,500 partners that have been certified in Microsoft CRM. "It's all about having dedicated partners."

Earlier this year, Microsoft announced its Small Business Specialists designation. Initially the program focused on validating expertise in Microsoft Windows and Microsoft Office, but the company has added Server Business Server and CRM to the mix.

Whether you install and manage it yourself or rely on a third-party, Microsoft is positioning CRM as inherent to a business's workflow. "We are looking at it as a holistic system. CRM is an extension of the platform," said Kevin Faulkner, senior director of marketing for CRM. "We don't use the word 'integration' when talking about Outlook. It's baked in. You can't tell where Outlooks end and CRM begins. It's a natural flow."

One example of the benefit of that integration is e-mail marketing. Microsoft CRM 3.0 includes a new feature that lets small business quickly prepare an e-mail campaign and then track results.

"The core of CRM is sales, service and marketing," Faulkner said. And for that reason, Microsoft no longer offers module pricing for its CRM product. The three modules — sales, service and marketing — are bundled in a suite that will cost about $449 per user. Faulkner said that is a 30 percent savings over the previous pricing model. The server software cost about $528 per server. So a business with 10 users would pay a one-time license fee of about $5,000 for Microsoft CRM 3.0.

In keeping with it new focus on Web-based software, Microsoft will offer CRM, through its partners, as a hosted application. "We realize that on-demand is a viable model," Faulkner said. Regardless of how small businesses want software delivered, "we want to be the vendor of choice," he said. Microsoft partners will pay $24.95 per user, per month, he said.

However, how and what you pay for the service could take many forms. "Some [partners] may use a rent-to-own model, or may offer a three-month free hosted trial — it's up to the partners," Faulkner said.

Both the Small Business Edition and the Professional Edition ($622 to $880 per user and $1,244 to $1,761 per server) are available today in English, with more than 20 other languages expected to be released in the coming months.

Dan Muse is executive editor of's Small Business Channel, EarthWeb's Networking Channel and ServerWatch.

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